## Yen or CAD? The Smart Choice for Taiwan Dollar Investors

December 2025, the TWD/JPY exchange rate hits 4.85, prompting many to ask: Is now the right time to exchange for yen? But behind this question lies a deeper logic—you’re not just exchanging currency, you’re hedging against global forex market fluctuations.

Interestingly, many Taiwanese investors consider swapping CAD for TWD simultaneously, aiming to diversify currency holdings to reduce risk. But as one of the world's three major safe-haven currencies (USD, CHF, JPY), the yen’s role is quite different. Take the Russia-Ukraine conflict in 2022 as an example: the yen appreciated 8% in a single week while the stock market fell 10%—a testament to the power of safe-haven assets.

## 3 Core Reasons Why Yen Is Worth Investing In

**Why are investors not just traveling with yen, but actively buying it?**

First, Japan’s economy is stable, with a sound debt structure, making the yen a “safe haven” during market turbulence. Second, the Bank of Japan is expected to raise interest rates (anticipated on December 19 to 0.75%), a 30-year high that could attract arbitrage capital inflows. Third, compared to other foreign currencies like CAD, the yen has higher liquidity and international recognition—you can easily settle or invest in yen anywhere in the world.

Since the start of the year at 4.46, the yen has appreciated by 8.7%, making now a favorable time to exchange.

## How to exchange most cost-effectively? Real cost comparison of 4 channels

While it seems simple to exchange yen, each method has hidden pitfalls. We tested exchanging 50,000 TWD as an example:

**Bank Counter: The Most Expensive Option**

Bringing cash to a bank branch or airport counter and using the “cash selling rate.” It’s convenient but the rate is 1-2% worse than the spot rate. For example, Taiwan Bank’s cash selling rate is about 0.2060 TWD/JPY, with an additional handling fee of 100-200 TWD, resulting in a total loss of 1,500-2,000 TWD. Only consider this in emergencies, like last-minute airport needs.

**Online FX Exchange + In-Person Pickup: A Balanced Approach**

Using bank apps or online banking to convert TWD to JPY at the “spot selling rate” (about 1% better than cash rate), then withdrawing cash at counters or ATMs. Handling fees start at 100 TWD. The advantage is you can buy in stages, observing exchange rates (e.g., buying multiple times when the rate dips below 4.80), with a loss of 500-1,000 TWD. Suitable for experienced forex traders, long-term holders, or those investing in yen deposits (current annual interest 1.5-1.8%).

**Online Currency Exchange + Airport Pickup: The Smartest Travel Solution**

Fill in currency, amount, pickup branch, and date on the bank’s website, then pick up with ID and transaction notice. Taiwan Bank’s “Easy Purchase” online exchange is fee-free (using TaiwanPay costs only 10 TWD), with a 0.5% better rate. The key advantage: Taoyuan Airport has 14 Taiwan Bank outlets, including 2 open 24 hours, allowing you to pick up cash before departure. Losses are only 300-800 TWD, making it ideal for planned trips.

**Foreign Currency ATMs: Time-Priority Emergency**

Using chip-enabled debit cards at foreign currency ATMs to withdraw yen cash, supporting 24-hour, interbank transactions (interbank fee only 5 TWD). Limited locations (~200 nationwide), fixed denominations (1,000/5,000/10,000 JPY), and risk of sold-out machines during peak hours. Losses of 800-1,200 TWD. Suitable for those with no time to visit banks or urgent needs.

## Timing the Yen Exchange

The TWD/JPY rate has risen from 4.46 to 4.85 since the start of the year, a significant increase. But this doesn’t mean it’s the lowest point in history.

Based on recent central bank trends, USD/JPY has fallen from a high of 160 to around 154.58, with a short-term rebound possibly to 155, but medium to long-term forecasts suggest below 150. This indicates the yen still has room to appreciate—meaning, **staggered entry is wiser than a one-time full exchange**.

Recommended strategy:
- Phase 1 (immediately): Exchange 30%, using online exchange and airport pickup
- Phase 2 (in 2 weeks): Observe rates; if TWD/JPY drops below 4.80, exchange another 30%
- Phase 3 (after 1 month): Decide the final 40% based on trend

This approach averages costs and minimizes the impact of short-term 2-5% fluctuations.

## Next steps after exchanging yen: Don’t let your money sit idle

Many people just hold onto their yen after exchanging, but that’s a missed opportunity. While yen is a safe haven, it also fluctuates bidirectionally, and inflation can erode its value if left idle.

**Yen deposits**: The most stable option. Banks like E.SUN and Taiwan Bank offer foreign currency accounts starting at 10,000 yen, with annual interest rates of 1.5-1.8%, suitable for short-term parking of funds.

**Yen ETFs**: Track yen indices (e.g., Yuanta 00675U), with management fees as low as 0.4%, supporting fractional shares, ideal for regular investment. This diversifies currency risk and participates in the Japanese market.

**Yen insurance policies**: Medium-term holdings. Companies like Cathay and Fubon offer USD/JPY savings insurance with guaranteed interest rates of 2-3%, combining protection with savings.

**Forex swing trading**: If you have confidence in exchange rate trends, trade USD/JPY or EUR/JPY directly on forex platforms, which offer zero commissions, low spreads, and support both long and short positions 24/7. Small capital is enough—classic for short-term forex trading.

## What to bring when exchanging yen? Common pitfalls

**Required documents**: Locals bring ID + passport; foreigners bring passport + residence permit. Under 20? Must be accompanied by a parent. Large exchanges (over 100,000 TWD) require source of funds declaration.

**ATM withdrawal limits**: From October 2025, foreign currency ATM daily limits are reduced to 100,000-150,000 TWD. Consider splitting withdrawals or using your bank card to avoid the 5 TWD interbank fee.

**Cash shortages during peak hours**: Airport and commercial district foreign currency ATMs often run out during busy times. Planning ahead is safer than relying on luck.

## Core conclusion

Yen has evolved from “travel pocket money” to “hedging asset + investment target,” reflecting Taiwanese investors’ increased awareness of global risk management. Whether preparing for a trip to Japan next year or seeking extra protection against TWD depreciation, the key isn’t “when to exchange,” but “how to stagger and utilize the exchange.”

From losing only 300-800 TWD on online exchanges with 50,000 TWD, to emergency cash via foreign ATMs costing around 1,200 TWD, each method suits different scenarios. The smart approach: plan your timing and channels, buy in stages based on exchange trends, and after exchanging, use deposits or ETFs to keep your assets growing. This way, you not only enjoy your trip but also add a layer of protection to your assets amid global forex fluctuations.